China, with 1.4 billion people, has four times the U.S. population in about the same land area, and a hot consumer demand for Western pediatrics. Other U.S. systems have beaten Sanford to Asia, but with specialty services, leaving an open field for Sanford to come in with primary care for children, Link said.

Plans in China coincide with growth in Ghana on the Atlantic coast of Africa. Sanford has four clinics there, a fifth coming this year, and has plans not for 10, as first announced, but now hundreds in Ghana as well. If it all happens, China and Ghana together would give Sanford more outlets on foreign soil than in the U.S., where the network serves 126 cities in nine states. The foreign startups — clinics only, with no hospitals — are smaller and far less costly than projects closer to home, but the international potential drives planners toward a goal of having the Sanford name known worldwide for its work in children’s health. Kunming, where Sanford will open its first Chinese clinic in October, has 7 million people, more than the entire population in Sanford’s main service area in the U.S. Northern Plains.

“The scope of it is very ambitious. There are certain health care systems that are planting their flag around the world — Cleveland Clinic, Mayo Clinic, Johns Hopkins. Sanford is definitely entering that same arena,” said Michael Wyland, a Sioux Falls consultant who follows the health industry.

The initiatives flow from T. Denny Sanford’s $400 million gift in 2007 that changed the Sioux Valley health system into Sanford and established a goal of having the newly defined network see the world as its backyard. Officials offer no estimate on total cost of foreign growth, but it is relatively little. Sanford will be a partner with a Chinese business in Kunming in an arrangement where Sanford will not pay rent but will receive a management fee to offset travel and employment expenses.

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“The net effect will be a negligible financial gain ... that is far outweighed by the other benefits,” said Jim Slack, vice president of Sanford World Clinics.

Logistics of growth

Moving into other parts of China is not as simple as replicating what happens in Kunming. Each additional city might come with a different format to be worked out case by case.

In Ghana, Sanford will own many of its buildings with the government as landlord. Building costs in Ghana are one-eighth to one-tenth of U.S. rates. A typical $5 million clinic in Sioux Falls would cost Sanford about $500,000 in Ghana, but Sanford is deciding it can scale that back to about $165,000 for a facility able to see 25,000 patients a year. Sanford is discussing a public-private partnership with the Ghana ministry of health, which could access government grants to support its work. In both nations, each new clinic must offer the prospect of breaking even financially before Sanford will buy in.

The attraction in China is “a rising middle class that has lots of disposable income,” said Eric Harwit, a professor of Asian studies at the University of Hawaii and adjunct fellow at the East-West Center, a think tank in Honolulu.

“China is now the world’s biggest market for passenger cars. Just about anything you can think of that middle-class American citizens want, they want in China,” Harwit said. “It’s not everybody, but there are maybe a couple hundred million people in China that have that kind of income.”

U.S. systems have gone into China with different priorities. The Cleveland Clinic’s work there concerns Parkinson’s, dementia, strokes and brain disorders. Johns Hopkins Medicine International is working with Sun Yat-sen University in scientific study. “Johns Hopkins does not manage or operate clinics in China, but we do have a research collaboration as part of our mission to bring knowledge to the world and improve health care locally,” spokeswoman Kim Hoppe said from Baltimore.

The opportunity in China ties directly to local perceptions.

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“For a lot of Chinese, there’s a distrust of their own services,” Harwit said. “They’ve had problems with food safety. They don’t trust regulatory agencies that deal with things like clean water. With infant formula there was a big scandal, people bringing in suitcases full of infant formula from Hong Kong. I think it’s not necessarily inferior quality, just the idea they would trust Western medical care a little better.”

The Western model

It also ties to different delivery models in medicine. The Sanford children’s clinic in Kunming, a city in southwest China, will have five doctors and 10 nurses. Most will be local professionals. Two will be Sanford employees, including a clinic director and Dr. John Tannous, who will be lead physician and mentor to four Chinese pediatricians. The mission will be to import Sanford’s model of care.

In China, a typical scene in pediatrics is for children coming to a clinic to be set up immediately with intravenous medications, Slack said. It’s a routine on par with someone in a U.S. clinic receiving a finger poke for a blood test. He estimated that 50 percent of treatments in China start with an IV.

“You walk into a room and there are 150 chairs and poles. They are just running fluids through people left and right,” Slack said.

The whole industry has a bit of an assembly line feel.

“Patients take a number like it’s a bakery counter, and the average visit is seven or eight minutes, even for a first visit,” Dr. Stephen Samples, a spokesman for the Cleveland Clinic, told the Cleveland Plain Dealer.

Sanford hopes to help families move into a preventive health mode where families develop relationships with doctors. Its partner in Kunming is YMCI Calmette Medical Investment & Management Co. YMCI, which will own the clinic, stands for Yunnan Metropolitan Construction Investment. The pediatric clinic will acquire its prescription drug supply from the attached hospital its partner operates. The clinic will have a sign “Sanford World Clinic” in prominent English lettering at the top of the two-story facility, with Chinese characters below. That detail is more than a matter of aesthetics.

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Branding worldwide

The Cleveland Clinic takes a different approach. The Ohio-based health giant is collaborating with a medical college in Beijing for its work with brain disorders, but for the time being it is under an agreement not to use the clinic’s name in marketing.

“We have to protect our brand. We only brand when we’re comfortable the quality is there,” Samples told the Plain Dealer.

Wyland, the Sioux Falls consultant, said the distinction speaks to Sanford’s strategy.

“Preservation of brand is every bit as important as promotion and expansion of brand,” he said. “It’s a considered decision about how and when to use your name, your logo, your branding. Sanford has invested heavily in the Sanford brand, from Chinese clinics to its weight loss program to insurance to athletics and community activities. That’s their corporate philosophy, and it’s certainly valid. It’s equally valid for Cleveland Clinic to be conservative about a brand it has built up over decades, wanting to make sure new ventures prove themselves.”

Sanford officials said the name speaks to what the Chinese are looking for. Link said no one is under the impression Sanford is on par with Coke or Nike as a world brand, but the Sanford sign makes it clear the clinic offers Western medicine.

“They know it as United States health care,” he said.

The lead-up to the China move included a tragic coincidence last week when Kunming was the scene of mass violence as terrorists stabbed 29 people to death. The terrorists were Muslim separatists, the Wall Street Journal said. Many of the wounded went to YMCI’s main downtown hospital. Slack said Sanford is following the events but considers it an isolated incident not presenting any long-term risk.

Harwit, the professor in Honolulu, said Kunming is one of the safer areas of China.

Learning the system

A downside for Sanford, or perhaps the learning curve, he said, will be the need to learn the Chinese system. China being communist should not be a hindrance, he said. “It’s really only communist in name. Economically, it’s a pretty free market and capitalist system ... and medical care is not so politically threatening to the government.”

On the other hand, Sanford might be in for a lesson in one-party government if a legal issue ever arises, because police and the court system are not developed to the same level as U.S. justice, Harwit said.

He thinks the move otherwise is appealing for both sides.

“I would think the Chinese side wants the legitimacy of Western management that they can advertise for attracting clients,” Harwit said.

The plans for additional clinics do not yet have a timeline. In Ghana, where the clinics are for people of all ages, Sanford expects to see a quarter-million patients a year.

“We’re looking at possibly 300 clinics in Ghana. There’s a very significant need. In China, it’s the same potential, maybe more,” Link said.